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Jealous Cow posted:Don't forget national insurance, which has different brackets and rates on top if income. Other than that, yes they use marginal rates like us. Thanks! MY WIFE was talking to some expats who were seemingly convinced that if you made a dollar over the limit, oh man, you'd be bumped into that terrifying next tax bracket!
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Aug 24, 2013 17:52
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kaishek posted:Thanks! MY WIFE was talking to some expats who were seemingly convinced that if you made a dollar over the limit, oh man, you'd be bumped into that terrifying next tax bracket!
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Aug 24, 2013 18:09
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SiGmA_X posted:A frighteningly large amount of intelligent Americans make this argument too. It baffles me as to how they think that, marginal brackets are easy to understand! Also tax credit =/= tax deduction.
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Aug 24, 2013 18:42
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Jealous Cow posted:Also tax credit =/= tax deduction. I'm kidding about the question. But I recently read a discussion on another forum that was using logic shockingly close to this. I have a pretty good understanding of the tax code, well, as much as a 4th year undergrad accounting major who has no practical experience but has taken two dedicated tax courses can have.
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Aug 24, 2013 19:50
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Actually, I have another question since it takes two goddamn weeks for my current accountant to reply to emails - I need to get rid of her. I own a house, of which I'm currently using a 10x9 bedroom as the home office space, which is full floor to ceiling with paperwork, parts, computers, and all the assorted cables and dongles and bits and bobs you'd expect for someone that's been hoarding leftover poo poo doing IT work for the last decade - stuff that might be of use and of value due to clients that love poo poo left over from 2002 for their projects. What I need is about double or triple that space plus storage for stuff. I have an already converted garage I'd like to partition into two spaces - the side for the office being about 300sqft give or take. I'd have to frame a non-structural wall, do electrical work, duct hvac (or do a minisplit or something similar), put a door in a wall to have seperate access from the living room, and flooring, paint, etc. How much of that can the corporation pay for and write off as a legit business expense, and how much of that am I on the hook for? Basically, what's the best way to do this that keeps it as legit for tax purposes as is managable. I'm assuming that the total cost for this will end up in the approximate $5,000 range on the high side - electrical will be the biggest cost, since framing a single wall and putting in a door isn't exactly incredibly expensive. I plan to do what work I can reasonably do, stuff like painting and installing a floating floor and the wall mounted shelf stuff and so on.
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Aug 25, 2013 03:43
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AbbiTheDog posted:I leave the estimate questions for Furu. Those just drive me crazy and have been asked at least once on every page. All I ever say is that the W-4 worksheets suck and I charge money to do an analysis. There are far too many variables involved to go into detail over a forum post and without a fee. SiGmA_X posted:A frighteningly large amount of intelligent Americans make this argument too. It baffles me as to how they think that, marginal brackets are easy to understand! I end up explaining this to at least two dozen clients each year.
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Aug 25, 2013 17:18
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cstine posted:Actually, I have another question since it takes two goddamn weeks for my current accountant to reply to emails - I need to get rid of her. S-corporations are prohibited from renting from their shareholders, so a home office is not generally allowed (nor is rent paid for "storage space"). However, there may be a workaround if you create an accountable plan to reimburse yourself, as discussed a few pages back. Or, you can treat the home office expense (along with any other unreimbursed employee expenses) as a miscellaneous 2% itemized deduction.
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Aug 25, 2013 17:22
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furushotakeru posted:S-corporations are prohibited from renting from their shareholders, so a home office is not generally allowed (nor is rent paid for "storage space"). However, there may be a workaround if you create an accountable plan to reimburse yourself, as discussed a few pages back. Or, you can treat the home office expense (along with any other unreimbursed employee expenses) as a miscellaneous 2% itemized deduction. I'm already having the S-Corp pay a portion (15%) of the mortgage based on space used and picking that up as income on a Schedule E which results in that being a net zero (there's an income AND a business cost so you end up even - unless my current accountant has royally hosed that up). Edit: that was outside the scope of this thread and had more to do with incomplete and poor advice and being poorly informed of what's required by the current person I'm working with - who is not whom I'm going to use going forward. cstine fucked around with this message at 19:34 on Aug 25, 2013 |
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Aug 25, 2013 17:46
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cstine posted:I'm already having the S-Corp pay a portion (15%) of the mortgage based on space used and picking that up as income on a Schedule E which results in that being a net zero (there's an income AND a business cost so you end up even - unless my current accountant has royally hosed that up). A better question might be "why bother?". So you take 15% of your mortgage off your K-1, then put 15% of your mortgage on Sch E as rental income, and deduct 15% of your mortgage to zero out the Schedule E. Why not just skip all that and deduct 15% of your mortgage along with the other 85% on schedule A, leaving you in the exact same net position? Perhaps your preparer charges by the form or something. It's not like you are saving on SE tax or anything.
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Aug 26, 2013 17:39
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furushotakeru posted:A better question might be "why bother?". So you take 15% of your mortgage off your K-1, then put 15% of your mortgage on Sch E as rental income, and deduct 15% of your mortgage to zero out the Schedule E. Why not just skip all that and deduct 15% of your mortgage along with the other 85% on schedule A, leaving you in the exact same net position? Perhaps your preparer charges by the form or something. It's not like you are saving on SE tax or anything. Moves the deduction to the front of the 1040, reducing his AGI, which might help in other AGI related credits/deductions.
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Aug 26, 2013 18:01
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furushotakeru posted:A better question might be "why bother?". So you take 15% of your mortgage off your K-1, then put 15% of your mortgage on Sch E as rental income, and deduct 15% of your mortgage to zero out the Schedule E. Why not just skip all that and deduct 15% of your mortgage along with the other 85% on schedule A, leaving you in the exact same net position? Perhaps your preparer charges by the form or something. It's not like you are saving on SE tax or anything. As far as I'm aware I'm paying a flat rate for them regardless of what they do - I've been fairly non-involved other than a sanity check (do these numbers seem about right?) so I'm not 100% sure on what he's doing for 2012 - I haven't actually filed yet. Yeah, I'm aware what the date is, but this is mostly my fault it's going to the last minute.
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Aug 26, 2013 18:20
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cstine posted:As far as I'm aware I'm paying a flat rate for them regardless of what they do - I've been fairly non-involved other than a sanity check (do these numbers seem about right?) so I'm not 100% sure on what he's doing for 2012 - I haven't actually filed yet. If you decide you need someone else to help you with your corporate return you can always shoot me an email
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Aug 26, 2013 18:29
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furushotakeru posted:If you decide you need someone else to help you with your corporate return you can always shoot me an email I actually just got the call that 2012's stuff is done and ready - for 2013, though, I'm not using them again, so yeah, I'll definitely email you once that becomes a thing.
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Aug 26, 2013 22:29
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I have a stupid question. American Eagle bullion coins are legal tender at their face value. The face value of the Gold 1 ounce American Eagle is $50, while the bullion value is currently about $1400. What's to prevent an employee from requesting his pay in American Eagles rather than dollars? Seems like the perfect way to cut down on your income tax dues.
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Aug 28, 2013 23:34
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Ron Don Volante posted:I have a stupid question. That employee would feel like a genius until he got a W-2 at the end of the year showing wages of $1400 a pop instead of $50.
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Aug 28, 2013 23:50
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Ron Don Volante posted:I have a stupid question.
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Aug 29, 2013 00:22
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Ron Don Volante posted:I have a stupid question. There is an interesting tax court case, which I don't remember all the details to, but it came down to a taxpayer who sold some land to another taxpayer who paid them in bullion coins tried to avoid paying tax on the gain by saying they paid the face value of the coins and not the FMV of the coins. The tax court basically told them to stuff it and pay their tax bill.
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Aug 30, 2013 17:29
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I was sent a W-9 form along with other forms to fill out for pulling a small amount (<$300) out of a 457 plan that I contributed to while working part time a few years ago. The instructions seem to be contradictory. I'm pretty sure I'm exempt from back-up withholding because I've properly reported interest income in the past and I've never been notified otherwise, but do I check the "exempt payee" box at the top? I assume I check the "individual/sole propietor" box as well or do I ignore that since this is not related to a business that I own? Thanks!
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Sep 3, 2013 03:49
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Not sure if this is the best thread or not, but here goes. In about 3 weeks I'm moving to Buffalo, NY from Providence for a new job. I'll be working as a contractor instead of a regular, full-time W-2 employee. It is to my understanding that the company will simply write me a check for my time on site and working-- no taxes taken out or anything, correct? I'll still be in the same federal tax bracket of 25% it looks like, but I'm just going to throw 30% of my paycheck into a savings account I guess. Then at the end of the year when I do my taxes whatever is left over will be my "refund". Just wondering if there's any info I'm missing, and also is there anything "smarter" to do with the money instead of leaving it in a savings account?
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Sep 4, 2013 15:06
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Sab669 posted:Not sure if this is the best thread or not, but here goes. In about 3 weeks I'm moving to Buffalo, NY from Providence for a new job. I'll be working as a contractor instead of a regular, full-time W-2 employee. It is to my understanding that the company will simply write me a check for my time on site and working-- no taxes taken out or anything, correct? You're going to need more than 30%.
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Sep 4, 2013 16:36
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Two things: remember the payroll tax (Medicare and Social Security) is gonna run about 15%, a.d if you have any deductible work expenses, keep track of them.
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Sep 4, 2013 17:38
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Don't forget the state taxes too - you have to pay those as well. 30% isn't *that* far off from my experience doing the 1099 thing, but that's dependent on you tracking every cent of business expense and writing off everything you can, including mileage - and actually having a fair amount of actual business expenses. The last year I did a 1099 I ended up spending about 35% of my total gross income as either FICA or income taxes - on about $170,000 combined between me and the wife. I've since done the s-corp thing, and that's a somewhat helpful mitigation method, though a bit of a time suck.
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Sep 4, 2013 18:45
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Don't forget quarterly estimated tax payments.
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Sep 4, 2013 19:21
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cstine posted:Don't forget the state taxes too - you have to pay those as well. Maybe your teenage kids are assisting you in your business.
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Sep 5, 2013 18:05
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So my first real job out of college might be as a 1099 position. Can you claim both a standard deduction while deducting the cost of your health care and half of the FICA tax? Or is it one or the other?
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Sep 12, 2013 18:56
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Erkenntnis posted:So my first real job out of college might be as a 1099 position. Can you claim both a standard deduction while deducting the cost of your health care and half of the FICA tax? Or is it one or the other? Wait you can deduct health care? I'm starting a 1099 position in 11 days, will be my first time.
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Sep 12, 2013 19:05
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Sab669 posted:Wait you can deduct health care? I'm starting a 1099 position in 11 days, will be my first time. Reading from this is leading me to believe that you can. Look at number 9 and 10.
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Sep 12, 2013 19:16
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Erkenntnis posted:Reading from this is leading me to believe that you can. Look at number 9 and 10. 9 and 10 are two different points. The health insurance (SEHI) is for the PREMIUMS only for your medical care, other out of pocket go on Schedule A. Your SEHI deduction is limited to your self-employment income less part of your self-employment tax. The self-employment tax (SE) is based on your net self-employment income and is around 15% IN ADDITION to your normal federal and state income taxes. This is the employee/employer share (since you're self-employed, you're paying both) of medicare and social security. Since businesses get to deduct their share of the payroll taxes they pay as an expense, you get to take half of the SE tax as a deduction on the front of your Form 1040. The standard deduction is a completely different topic and is pretty much unrelated to my points referenced above.
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Sep 12, 2013 19:48
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So what is the answer to my question? Can I have both a standard deduction and those two as well? I'm pretty novice to this stuff.
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Sep 12, 2013 20:21
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Abbi just answered your question. Yes, the standard deduction is separate from the SE tax deduction and the SE health insurance deduction. You can have both. Just remember the SE health insurance deduction is healthcare INSURANCE, not healthcare COST.
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Sep 12, 2013 21:02
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Admiral101 posted:Abbi just answered your question. Yes, the standard deduction is separate from the SE tax deduction and the SE health insurance deduction. You can have both. Thanks, monday is a deadline and I'm pretty frazzled at this point.
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Sep 12, 2013 21:48
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Thanks for dealing with my naivety, guys. I'm sure people pop in here and ask the same question every couple of days. I do have another - do you get a standard deduction for both your federal and state taxes?
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Sep 13, 2013 01:24
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Erkenntnis posted:Thanks for dealing with my naivety, guys. I'm sure people pop in here and ask the same question every couple of days. I do have another - do you get a standard deduction for both your federal and state taxes? Depends on your state. Some do, some dont.
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Sep 13, 2013 02:01
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I have a question about incorporation — I didn't see any links in the FAQ, so feel free to send me elsewhere if I'm in the wrong thread. I work in the entertainment business in California. I receive W2 wages for my day job, but my particular profession means that I'm always moving from show to show every 6 to 9 months. I receive benefits (health and pension) through my union. I also work as an independent contractor on the side and receive 1099 income (and occasionally W2 for larger jobs) for payment. But the majority of my income (75-90% of my income per year) comes from my primary W2 employment. I've noticed that a large number of people in my profession have chosen to incorporate. What are the benefits for someone like me? What is the relative amount of upkeep involved with choosing to incorporate? Right now I file jointly with my wife, if that affects anything. Thanks in advance.
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Sep 20, 2013 20:18
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Cocoa Ninja posted:I have a question about incorporation — I didn't see any links in the FAQ, so feel free to send me elsewhere if I'm in the wrong thread. There is no tax related benefit that I could think of resulting from you incorporating. Instead, you would have another tax return to file and the corporation would owe CA a minimum of $800 per year even if you had little or no profit.
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Sep 20, 2013 21:31
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My wife and I (she is a legal permanent resident with a green card, I a US citizen) are potentially looking to buy a house, and there is the possibility that my wife's mom (non-resident alien; she lives in the UK) would gift money to us to assist in the purchase of said house. I started looking things up, and I came across this: http://www.irs.gov/Businesses/Gifts-from-Foreign-Person Based on my reading of the above link, it seems like if she gives us less than $100k per year (which we are definitely in no way in danger of exceeding), there is no need to file the form and in either case the gift isn't taxable. Am I correct in this interpretation? Would hate to transfer the money over and then realize that we are going to get dinged come tax time. crazyfish fucked around with this message at 21:38 on Sep 21, 2013 |
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Sep 21, 2013 21:35
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crazyfish posted:Am I correct in this interpretation? Yes - the Estate and Gift tax code sections don't (generally) apply to non-resident aliens since they aren't within the taxable sphere of the IRC (it would likely be considered taxable gifts if it's real and/or personal property in the US being gifted, which isn't the case based on your facts), so the best the IRS can do is demand informational filings to make sure that you're not disguising actual taxable income (through one section of the code or another) via a third party if it's over a certain amount in a year ($100,000 in this case); recipients of gifts never owe tax (that is, it's excludable from income for them anyway), but rather the giftor would be subject to (i) a ~$14,000 per donor/$28,000 exclusion per year if there is a married couple that elects to gift jointly and then (ii) a $5.25 million unified gift-estate credit before they start getting taxed on lifetime gifts (the second stop-gap wouldn't apply to non-resident aliens, however, so after $14,000 or $28,000 in gifts, they would technically owe gift taxes per the gift tax schedule)).
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Sep 21, 2013 22:54
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I don't know if this the right thread because its not income tax but I need some help. I run a start up production company and and we recently did a series of commercials for a church and my state requires sales tax on electronic services. I've never dealt with tax exemption. I found a certificate of exemption form but I am unsure on what else I need to make sure I don't get penalized. We would loose out on a decent piece of money if I miss anything so I am trying to be thorough. Anyone have any advice or know what I might need or have to file with the state? Edit: This is in Minnesota.
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Sep 21, 2013 22:57
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Hi tax goons! I did some legal consulting in the amount of $1500, and will receive a 1099 for it (no taxes taken out). I'm assuming I'll have to file as self-employed, and pay SE taxes. Anyways, my question is this: I pay about $250 a year in membership fees to two professional associations. Can I deduct those fees from the $1500 as business expenses? Thanks!
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Sep 23, 2013 05:15
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gp2k posted:Hi tax goons! I don't see why not. You can deduct them on Schedule C under "dues and subscriptions".
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Sep 23, 2013 05:51
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